The chart below shows how VNOM performed 10 days before and after its earnings report, based on data from the past quarters. Typically, VNOM sees a +0.29% change in stock price 10 days leading up to the earnings, and a +1.80% change 10 days following the report. On the earnings day itself, the stock moves by -0.57%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Production Increase Forecast: 1. Increased Production Guidance: Viper Energy anticipates a production increase to 29.5 BO per day in Q4 2024, driven by a significant step-up in work-in-progress wells, particularly from Diamondback's operations.
Acquisition Impact on Growth: 2. Successful Acquisition: The completion of the Tumbleweed acquisition has added approximately five to six net wells to Viper's portfolio, enhancing future production growth prospects.
Shareholder Distribution Commitment: 3. Strong Shareholder Returns: Viper Energy declared a distribution of 83% of cash available for distribution in Q3 2024, exceeding the minimum commitment of 75%, reflecting a commitment to shareholder returns.
S&P MidCap 400 Addition: 4. S&P MidCap 400 Inclusion: Viper was added to the S&P MidCap 400 in September 2024, following its addition to the Russell 1000, indicating improved market presence and investor interest.
Merger Growth Potential: 5. Strategic Growth Opportunities: The merger between Diamondback and Endeavor is expected to enhance Viper's growth visibility and operational alignment, providing a strong foundation for future acquisitions and development plans.
Negative
Leverage Concerns Rising: 1. Increased Leverage Concerns: Viper Energy indicated a potential increase in leverage to 1.5 turns on a pro forma basis, raising concerns about financial stability amidst ongoing acquisitions.
Share Dilution Impact: 2. High Share Dilution: The company issued a significant number of shares for the Tumbleweed acquisition, resulting in an 83% payout of cash available for distribution, which is 8% higher than their usual minimum commitment of 75%.
Dividend Payout Adjustment: 3. Unique Q3 Dividend Adjustment: The third quarter's dividend payout was adjusted to 83% due to the addition of 10 million shares, indicating potential volatility in future distributions as they stabilize post-acquisition.
Future Production Uncertainty: 4. Uncertain Future Production Growth: Despite a strong pipeline of work-in-progress wells, the company has not provided clear visibility on how the Endeavor merger will impact future production growth, leaving investors uncertain about long-term output.
Debt Management Concerns: 5. Potential for Increased Debt: The management acknowledged the need for a modest increase in debt to fund the Endeavor drop-down, which could strain financial resources if not managed carefully.
Viper Energy, Inc. (VNOM) Q3 2024 Earnings Call Transcript
VNOM.O
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